Hall of Fame Class of 2012

Thomas C. Graham



At the ripe young age of 47—and fresh out of an advanced management program at Harvard University—Thomas C. Graham was named president of Jones & Laughlin Steel Corp. (J&L) in 1974. At the time, Graham, a former draftsman and degreed civil engineer, was pretty much convinced he had hit the high point of his 25-year career in the American steel industry. The next two decades proved him wrong.

When Graham took the reins at J&L, the company was a “mediocre, mid-range performer.” Ten years later, the difference was dramatic and his imprint unmistakable: a merger with Youngstown Sheet & Tube Co. went smoothly, the installation of two continuous casters at the Indiana Harbor plant had introduced the company’s flat-rolled carbon steel business to the efficiency inherent in the revolutionary new technology, and the acquisition of Crucible Steel Co.’s Midland plant breathed new life into J&L’s stainless business.

Graham departed a newly invigorated J&L in 1983 to restructure the troubled steel business at U.S. Steel Corp. at the invitation of then chairman and chief executive officer David Roderick. The first profit-and-loss statement the company’s new vice chairman of steel and related raw materials at USX laid his eyes on showed a loss of $50 million for the previous month. “USS was then a collection of aging steel plants coupled with strong assets in coal and iron ore,” Graham recalled recently. “The steel business was draining cash out of the corporation and action was urgently needed.”

On Graham’s arrival at U.S. Steel, finished products were being shipped at a rate of 8.0 man-hours per ton. At his retirement in 1991, that measure had been sliced to 4.0 man-hours per ton and U.S. Steel had become a profitable steel company.

In the intervening 10 years, facilities at Gary, Ind., Clairton, Pa., Mon Valley, Pa., and Fairfield, Ala., were rationalized, the plate and structural products lines at Homestead, Pa., and Baytown, Texas, were closed, and a joint venture with Japan’s Kobe Steel Ltd. at Lorain, Ohio, was formed. The Geneva, Utah, plant was sold and the Pittsburg, Calif., plant was modernized as a joint venture with South Korea’s Posco Ltd.

Within weeks of his retirement from U.S. Steel, Graham was recruited by a syndicate of banks to “fix” a money-losing Washington Steel Co. and sell it. It didn’t take him long to diagnose the main problem, which he readily admits “astonished” him. “In a very hot market for flat-rolled stainless, Washington was operating its melt shop only six days a week and was concurrently buying hot bands from competitors to fill customer demand,” Graham recalled. “Although there was some reluctance initially on the part of the local union and management, the melt shop went to a seven-day schedule, which improved the P&L dramatically.” Washington Steel was subsequently sold to Lukens Steel Co. “very successfully.”

In 1992, he took the battered helm of Armco Steel Co. One of the first orders he issued called for the Armco Inc./Kawasaki Steel Corp. joint venture to break up its entire stock of ingot molds and charge the pieces, along with scrap, into the steelmaker’s basic oxygen furnaces. Although Armco’s steelmaking shops at Middletown, Ohio, and Ashland, Ky., were equipped with slab casters, the company continued to maintain costlier, less-efficient ingot practices at both locations. That had to stop. And it did.

When Graham landed at Armco Steel, the company was losing $50 per ton on shipments in contrast to industry average operating earnings of $20 per ton. In a move calculated to shock the organization into action, he greeted attendees at his first management-wide meeting with a go-for-the-jugular message: “We are the worst steel company in the world.” The statement had the intended effect, Graham recalled in a presentation several years later. “I was widely criticized—not about the validity of my statement, but simply because I said it.”

Graham retired from AK Steel, a new public company forged under his watch, in 1997, and the intervening five years served as testimony once again to the genius of his turnaround skills. The rapid righting of the ship was all the more remarkable given the cultural differences dividing the two joint-venture partners, particularly in the context of American and Japanese labor relations and in their dealings with their respective banks.

Along the way, Graham, who enlisted the help of Dick Wardrop and Mark Essig within 30 days of taking the reins at Armco Steel, “drove a stake through the heart” of what he considered several ill-advised ideas or “fantasies,” including restarting an “obsolete” blast furnace in Hamilton, Ohio. To eliminate mixed signals, the company terminated all consulting activity. And in an all-out push to conserve cash, it put its non-core assets on the sales block.

Not a tear was shed in the executive suite, although Graham is still quick to recall the solitude of working deep into the night at the Manchester Inn in Middletown, away from his family in Pittsburgh, and facing what he would later describe as a “Job’s list of afflictions.”

But if Graham ever wavered, he didn’t show it. He and his hand-picked lieutenants idled Ashland’s hot strip mill and all finishing units downstream of it, dismissed any notion of restarting idled blast furnaces at both Middletown and Ashland, and adopted the one hot strip mill and one cold mill operating configuration. By the middle of 1993—roughly one year after Graham set up shop in Middletown—Armco Steel had progressed from a regular practice of 17-percent secondary to 6-percent secondary, and its profit-and-loss statement was showing signs of real improvement.

“All this was possible because we sought out leaders,” Graham said. “We always had a loyal and committed work force in our plants. Unfortunately, they were not always well-led.” Within two years of Graham’s arrival, 75 of the top 100 positions in the company were held by new appointees. Graham credits much of the turnaround of Armco Steel and its rebirth as AK Steel to the turnover in these top positions. “When people ask ‘What was required to turn around AK Steel?,’ the answer is leadership,” Graham reflected a year into his retirement from the company. “There is no silver bullet or magic elixir. There are no 10 easy steps to guaranteed profitability.  What is always required is just plain, old-fashioned leadership.”

Finding leadership is far from an easy task. But over the years, Graham has demonstrated an uncanny ability to succeed at identifying, attracting and placing leaders in positions essential to meeting goals and making profits. And in a five-decade-long career that kicked off in 1948, when he was hired as a draftsman in the raw materials engineering department at J&L, Graham has proven to be one of that rarest and most difficult to find of all industry assets: a leader of leaders.

In many ways, the challenges Graham faced as a turnaround specialist were steeper than those encountered by the now-iconic pioneer of the mini-mill movement and fellow member of the AMM Steel Hall of Fame, Ken Iverson of Nucor Corp. Iverson built Nucor, the premiere mini-steel operation in North America, virtually from scratch, and with it he created a template for the entire electric-furnace-based segment of the industry. There would be no legacy costs, no entrenched attitudes, no obsolete facilities and no sacred cows. Graham, in contrast, rebuilt large chunks of the ailing blast-furnace-based segment of the American steel industry in much the same way, working tirelessly and decisively with the steady hand, confidence and clarity of a surgeon.

But Graham also knew how to swing an ax. His careful identification and elimination of inefficiency, whether in the form of facilities, operating practices, labor practices, bureaucracies or personnel, was quick, clean and relentless. Over the years, that style of reckoning earned Graham the nickname “the smiling barracuda.” The phrase was coined by a former Wall Street Journal reporter, Graham told AMM recently. “Frankly, I never felt it was terribly hurtful. I think he did it with a certain amount of affection.”

Graham may have been born smiling, but he showed few nascent signs of a barracuda-like attack mentality in his early years. The son of a grocer and a part-time schoolteacher, the Greensburg, Pa., native graduated from the University of Louisville in 1947 with a bachelor’s degree in civil engineering, compliments of the U.S. Navy. He was commissioned an ensign in the U.S. Naval Reserve that same year, and after serving two semesters as an instructor in civil engineering at the University of Pittsburgh he began his steel career in earnest at J&L.

Recalled to active duty to help fight the Korean War, Graham served in the Civil Engineering Corps in Japan, where his duties ranged from building an airmen’s club and a tank farm to lengthening runways in order to accommodate heavily loaded aircraft. “I had responsibility. I wasn’t working on a drafting board. The Navy was a renaissance. When I came back, things ramped up from then on. I was noticed, tapped on the head a couple of times, and about this time you start to see the sun coming up.”
That ramp-up continues. Graham, a founding member of consulting firm TC Graham Associates, has lost none of his appetite—or flair—for troubleshooting ailing mills, not a few of which the “smiling barracuda” hints he would love to sink his teeth into today. 


Luigi Danieli
William Hogan
Irving Rossi
John B. Tytus